Lambodhara Textiles Receives 'Hold' Rating from MarketsMOJO, Positive Quarter Results but Caution for Investors

Lambodhara Textiles, a microcap company in the textile industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on the company's high management efficiency, with a ROCE of 16.08%, and its strong ability to service debt, with a low Debt to EBITDA ratio of 1.14 times.
In the latest quarter, the company declared very positive results with a growth in net profit of 66.49%. Its PAT(Q) was the highest at Rs 3.18 crore, NET SALES(Q) at Rs 60.92 crore, and PBDIT(Q) at Rs 7.84 crore. Additionally, with a ROCE of 6.7, the company's valuation is considered attractive with a 1.4 Enterprise value to Capital Employed.

However, the stock is currently trading at a discount compared to its average historical valuations. Over the past year, while the stock has generated a return of 4.34%, its profits have fallen by -9%. This is due to poor long-term growth, with net sales growing at an annual rate of 3.83% and operating profit at 11.23% over the last 5 years.

Technically, the stock is in a mildly bearish range, with its MACD and KST technical factors also showing a bearish trend. Additionally, 39.28% of promoter shares are pledged, which could put additional downward pressure on the stock prices in falling markets.

In the last 1 year, Lambodhara Textiles has underperformed the market, generating a return of only 4.34% compared to the market (BSE 500) returns of 27.33%. While the company has shown positive results in the latest quarter, its long-term growth and technical factors suggest a cautious approach for investors. MarketsMOJO's 'Hold' rating reflects this sentiment.